US Treasury Secretary in Beijing
Yellen says decoupling from China is ‘impossible’
07/07/2023, 11:25 am
Mutual export restrictions strain trade relations between China and the USA. A complete decoupling is “neither desirable nor feasible” and would cost the global economy dearly, warns US Treasury Secretary Yellen. They therefore rely on “de-risking”.
US Treasury Secretary Janet Yellen believes that decoupling the Chinese and US economies is neither desirable nor feasible. “A decoupling of the world’s two largest economies would be destabilizing for the global economy,” she said on a visit to Beijing on Friday. “And it would be practically impossible.”
In recent months, the United States has begun restricting China’s access to what Washington considers to be particularly important technologies. The approach was dubbed “de-risking”: dependencies on the world’s second largest economy and the resulting security risks are to be reduced. “We want to diversify, not decouple,” said Yellen now.
The Chinese government announced on Monday that it would restrict exports of gallium and germanium, which are essential for chip production, from the beginning of August. The move was seen as a reaction to US restrictions on exports of semiconductors from China, even though Beijing claimed in the run-up to Yellen’s visit that it was “not targeting any country” with the measures.
The US Treasury Secretary nevertheless expressed “concern” in discussions with US businessmen in China. “We are still evaluating the impact of these measures, but they remind us of the importance of building resilient and diversified supply chains.”
Yellen arrived in the People’s Republic on Thursday for a four-day visit. According to official information, a number of issues are on the agenda, including the state of the global economy, climate change and the debt burden of poorer countries. Beijing had struck an optimistic note in the run-up to the visit. The Ministry of Finance stated that it hoped for a “strengthening of communication and exchange between the two countries”. “China-US economic and trade relations are mutually beneficial and win-win, and there is no winner in a trade war or in ‘decoupling and divesting’.”